TRENTON - New Jersey Department of Community Affairs (DCA) Commissioner Lori Grifa today announced that 13 municipalities awarded Transitional Aid are being required to sign a Memorandum of Understanding (MOU) agreeing to certain State oversight and reporting requirements in order to receive the aid dollars. All municipalities receiving discretionary aid are being required to sign the MOU whereas in past years, only certain municipalities were required to sign a similar, but less stringent memorandum.

Among other requirements, the MOU directs aid recipients to adopt a local pay to play ordinance that covers political contributions by all vendors, including those selected through a "fair and open process." The strengthened MOU is part of Governor Christie's reform effort to increase the efficiency and effectiveness of local governments statewide.

"The message the Christie administration is sending with the Transitional Aid MOUs is simple: municipalities facing fiscal challenges cannot depend on getting this aid year after year after year," said Commissioner Grifa. "They must rigorously work to get their financial house in order."

Aside from adopting a local pay to play ordinance, the MOU requires Transitional Aid recipients to:

Submit a Transition Plan on or before December 31, 2010, detailing how it intends to eliminate its reliance on Transition Aid. The Transition Plan must be limited to a period of four years or less;

Seek approval before hiring for new positions, positions not filled as of the MOU date, and essential positions vacated after the MOU date;

Use a "fair and open process" to procure all contracts exempt from public bidding;

Obtain approval before creating new payments in lieu of taxes (PILOTs) that do not share funding with schools and counties;

Obtain approval to create new services; expand existing services; pay for out-of-state travel or overnight stays; or allocate matching funds for a grant;

Prohibit funds for entertainment expenses and most educational expenses;

Meet with the Director or Division of Local Government Services staff quarterly to discuss budget and fiscal progress, or more often as requested by the Division.

"The Transitional Aid program requires participants to accept an appropriate level of oversight and agree to certain fiscal restraints so they can get on a path to self-sufficiency," said Tom Neff, Director of the Division of Local Government Services. "We intend to aggressively enforce the provisions of the MOU so taxpayer dollars aren’t wasted."

The $159 million Transitional Aid to Localities program, which was outlined by Governor Christie in the FY2011 budget, replaces the Extraordinary Aid, Special Municipal Aid and Capital Cities Aid programs. Municipalities have to apply for the aid and demonstrate severe structural financial problems.

Transitional Aid was awarded last month to the following 13 calendar year budget municipalities: Asbury Park, Bound Brook, Chesilhurst, Haledon, Harrison Town, Maurice River, Mount Arlington, North Arlington, Penns Grove, Prospect Park, Salem City, Sussex Borough and Washington Borough. A list of the calendar year recipients, their requested amounts, and aid awards can be viewed at http://www.nj.gov/dca/lgs/muniaid/10_aid/cy2010_transitional_aid_to_localities.htm on the DCA website.

The Transitional Aid applications of municipalities operating on a fiscal year budget are still under review with aid awards scheduled to be made later this fall. The public can review the applications at http://www.nj.gov/dca/lgs/muniaid/Trans_application.shtm on the DCA website.

The Transitional Aid program is implemented through the Division of Local Government Services, which works with local governments throughout the state to ensure their fiscal integrity and to support their efforts to comply with state laws and regulations.